Two kinds of offers
The national government issued yesterday two kind of offers, one for the creditors with a firm ruling and another one for the holdouts without one.
Creditors who don’t have a ruling in their favour and didn’t file claims at Griesa’s court were offered the so-called “base proposal” through which they would get the entire nominal value of their bonds plus 50 percent interest.
That was in fact the same deal reached with a group of 50,000 Italian creditors on Tuesday, who will receive a US$1.35 billion payment in cash. They accounted for 30 percent of all the debt that is subject to legal claims in Griesa’s court and 15 percent of the defaulted debt that was not restructured in 2005 and 2010.
On the other hand, holdouts who filed claims at Griesa’s court could choose either the base offer or the “pari-passu” offer, which sets different terms according to type of creditor.
Those with a firm ruling would get the entire nominal value but with a 30 percent debt haircut. That’s for example the case of NML, Aurelius and Blue Angel, among others. They now have a US$1.3 billion firm ruling from Griesa, which totals US$1.8 billion with interest. If they accept, they would get US$1.26 billion instead.
Meanwhile, those who filed claims at Griesa’s court but don’t have a firm ruling yet could also get the entire nominal value but with a 30 percent debt haircut. That’s the case of the so-called “me-too” bondholders, a group of creditors who did not accept the terms of the 2005 and 2010 restructuring not covered by Griesa’s initial ruling.
“In both the base and the pari passu offer, the government contemplates a payment in cash with funds obtained through the issuance of new bonds to be placed on the capital market,” the Finance Ministry said on a press release. “Creditors that take part in the proposal will have to resign all their rights, debts and legal actions related to their bonds.